Scams amounting to lakhs of crores of rupees seem to be the defining feature of the Sonia Gandhi-led UPA government. The theft of public assets is nothing new, however. It is a structural problem endemic to the system of governance imposed on the Indian people. The mind simply boggles at the sheer size of the loot. Estimates regarding money stashed away in offshore banks amount to $1 trillion and more. And thatâ€™s just one part of the wealth stolen from India.

We speak rather glibly about large numbers such as a trillion. But we actually donâ€™t have the capacity to comprehend such quantities. Since we are creatures limited in space and time, only small numbers are meaningful to us. A thousand we can understand. For example, a thousand seconds is just about 17 minutes, a time span we can appreciate.

Moving up the scale, even a million seconds is still fine since intuitively we understand how long 11 and a half days are. It gets harder to fully understand a billion second â€” nearly 32 years. Our lives are usually less than three billion seconds. But a trillion seconds is frankly impossible: no one has a real understanding of what 317 centuries feels like. The human species â€” homo sapiens â€” have only existed for about three trillion seconds. Thatâ€™s how large a trillion is.

So back to that stolen wealth sitting in foreign banks â€” around 1 trillion dollars. Thatâ€™s an unimaginably large amount of money. But there are larger numbers still, compared to which a trillion dollars is a trivially small number. That is the invisible theft that we are totally unaware of, leave alone being worried about it.

Letâ€™s do a little bit of arithmetic. At the time of Indiaâ€™s political independence from Britain, Indiaâ€™s population was around 350 million. The per capita GDP was around $250 (in constant 2010 dollars). Over the last 65 years, India has grown at an average GDP growth rate of close to 2.1 per cent. We call that the â€œNehru Rate of Growth,â€ (the rate at which the time to double the GDP is 35 years).

If you add up the GDP of India for the years 1950 to 2010, you get a figure of approximately $25 trillion. In other words, the Indian economy produced an aggregate amount of goods and services that are valued at $25 trillion. During that time, the population went up from 350 million to around 1.2 billion.

Now consider a counterfactual. What if instead of the 2.1 per cent annual Nehru rate of growth, the Indian economy had grown at a reasonable 6 per cent per year? What would have been the aggregate GDP then? The answer is a staggering $145 trillion. That means that Nehruvian socialism has cost India around $120 trillion so far â€” and counting.

The question that naturally arises is this. Is it possible for a large economy to grow at 6 per cent a year for many decades? Yes. China has grown at an average rate of around 8 per cent a year for over 30 years since 1978. India could have started at least four decades before China did. If India had, it would have occupied the space that China occupies today in the world of manufacturing. China has Indiaâ€™s failed Nehruvian socialist policies to thank for at least a part of its success.

What would India have been like had its leaders such as Jawaharlal Nehru and his daughter Indira Gandhi chosen to make India economically free? India would have been at least a middle-income country with a per capita income of around $10,000 per year.

Hundreds of millions of Indians would have had a shot at living decent lives and contributed to global welfare. The loss India has suffered hardly bears imagining.

It is high time India chose a different path â€” one that leads to prosperity instead of poverty. But for that, Indians will have to first fully understand how needless and futile socialism is for economic well-being.

He did what he thought was right at the time. We had just gotten our independence from the British after a long struggle. It would have been political suicide to invite foreign companies to take over the nations economy. Nobody would have liked. Even today when the government takes up the reform agenda, we many political parties reminding us of the colonial days, and how the west will take over our economy. Imagine undertaking these reforms then.

Good. You got me worried that I may have raised a racist flag (the last of my intention).

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oh no! I have seen your posts before. You are a good analyst. Many of your views are outright and many of them are generally acceptable to people like me.
you still haven't answered my question. If you don't mind I would like to know.

People who can read, understand and appreciate this article will realize why I have such a deep loathing of people with commie/socialist leanings as far as economy is concerned. People who speak nonsense about "Swadeshi" and protectionism are the biggest enemies of India today. Their thinking needs to be stamped out and run to the ground if we have to hope for any sort of progress in this nation.

oh no! I have seen your posts before. You are a good analyst. Many of your views are outright and many of them are generally acceptable to people like me.
you still haven't answered my question. If you don't mind I would like to know.

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I'm Malaysian from K.K. with Malaysian father and Filipino mother. How about you, what's your nationality?

People who can read, understand and appreciate this article will realize why I have such a deep loathing of people with commie/socialist leanings as far as economy is concerned. People who speak nonsense about "Swadeshi" and protectionism are the biggest enemies of India today. Their thinking needs to be stamped out and run to the ground if we have to hope for any sort of progress in this nation.

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I think Nehru did what he thought was right then. World was trying to recover from WW2, there was no way to know if democracy with market based Capitalism or Socialist democracy or Communism was good for the country. There were not many examples in the world then, that which direction a newly free country should take.
Not to mention, our entire political spectrum was socialist if not communist. Most of the freedom fighters were socialists including Bose and Bhagat Singh.

The distrust of Foreign companies was deep thanks to East India Company which also led suspicion for India based companies as well.

Though the fruits of flawed policies was becoming evident after the first decade, these policies were never analyzed objectively owing to towering stature of the leaders who stood for them.

There was always a possibility of course correction midway, but this was never done, thanks to the populist policies of Indira Gandhi. I believe she stands to be the real culprit. We always blame Nehru because he was the one who started it. But when his policies turned out to be not working, why nobody tried to fix this later?

Only after liberalization now we see how great we could have done had we adopted these policies then.

Having said that, I am also not for adopting market dependent economy with complete abandon. There has to be a fine balance keeping national interest in mind. Swadeshi has its value so does globally integrated economy.

I think Nehru did what he thought was right then. World was trying to recover from WW2, there was no way to know if democracy with market based Capitalism or Socialist democracy or Communism was good for the country. There were not many examples in the world then, that which direction a newly free country should take.
Not to mention, our entire political spectrum was socialist if not communist. Most of the freedom fighters were socialists including Bose and Bhagat Singh.

The distrust of Foreign companies was deep thanks to East India Company which also led suspicion for India based companies as well.

Though the fruits of flawed policies was becoming evident after the first decade, these policies were never analyzed objectively owing to towering stature of the leaders who stood for them.

There was always a possibility of course correction midway, but this was never done, thanks to the populist policies of Indira Gandhi. I believe she stands to be the real culprit. We always blame Nehru because he was the one who started it. But when his policies turned out to be not working, why nobody tried to fix this later?

Only after liberalization now we see how great we could have done had we adopted these policies then.

Having said that, I am also not for adopting market dependent economy with complete abandon. There has to be a fine balance keeping national interest in mind. Swadeshi has its value so does globally integrated economy.

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I blame the entire Gandhi family.

Very well, let us accept that Nehru did what he thought was right based on the conditions at that time. What I am concerned about, is the fossils who talk rot about protectionist policies and anti-liberalization today. They are the biggest enemies of India. India has more to fear from such thinking, than from the Pakis or the Chinese.

Well, Nehru failed to grasp the difference between colonialism and market driven economy. He thought that both are the same and should be shied away - self-assured yet insecure. This would have been forgivable had he been an ordinary person but as the first Prime Minister of India (and the father and grandfather of the following PMs) his flawed world view shaped the course of a newly independent country.

^^ Nehru is the past, what worries me is the idiots in present-day India who continue to spew the same bullshit, and confuse liberalized economy with colonialism and irrational "fear of the foreigner".

I think Nehru did what he thought was right then. World was trying to recover from WW2, there was no way to know if democracy with market based Capitalism or Socialist democracy or Communism was good for the country. There were not many examples in the world then, that which direction a newly free country should take.
Not to mention, our entire political spectrum was socialist if not communist. Most of the freedom fighters were socialists including Bose and Bhagat Singh.

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+1

Nehru at that time did what he and several others believed was right. By the mid-20th Century communism has not failed yet and nobody knew controlled economy would be such a big disaster. So Nehru tried a combination of capitalism and communism and he gave a lot of importance to industrialization of the country, by building dams, forges, powerplants. And more importantly setting up institutions in the field of research and education.

Indira Gandhi OTOH was probably more at fault, by the early 70s it was more or less clear that license permit raj is not working, but instead of dismantling it, she took it further by Bank Nationalisation. If the economy had been opened up in the 70s then the country would have been in a great position to take advantage of all the institutions that Nehru helped build.

Well, Nehru failed to grasp the difference between colonialism and market driven economy. He thought that both are the same and should be shied away - self-assured yet insecure. This would have been forgivable had he been an ordinary person but as the first Prime Minister of India (and the father and grandfather of the following PMs) his flawed world view shaped the course of a newly independent country.

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Not meaning to get personal , as u're half Filipino, Filipina has always been a "market driven' economy after WW2 and was ahead of whole Asia to an extent with American support in various ways. Why is Filipina today lagging way behind even within ASEAN despite a big educated English-speaking population? Just feel your "market" arguments are flawed to explain India's case too.

Not meaning to get personal , as u're half Filipino, Filipina has always been a "market driven' economy after WW2 and was ahead of whole Asia to an extent with American support in various ways. Why is Filipina today lagging way behind even within ASEAN despite a big educated English-speaking population? Just feel your "market" arguments are flawed to explain India's case too.

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Market economy has nothing to do with Philippines' dismal economic performance in the last 30 years. You have the Marcos dictatorship to blame for it. That dictatorship left its country's civil service deeply mired in corruption (killing meritocracy and efficiency) and the country in huge external debt (I was informed by my mother that a lot of these loans went to the pockets of the Marcoses and their cronies) which diverted a lot of resources to service it (away from education and defence). Until now the country is still reeling from the Marcos legacy since the public officials that got used to corruption in the Marcos days and the structural destruction to its education, politics and business climate still have to be fully addressed.

Also, the Marcos dictatorship and the forceful way in which it was removed has left a deeply fractured society that is marked by political instability (much like what is being played out in Thailand now between red shirts and yellow shirts but in Philippines' case was only more intense). But I the Philippines is slowly getting over the shocks of the Marcos era. Their economy is recovering and their market is the darling of Asia.